What Kind Of Health Insurance Is Best?
Do you have to pick a health plan from a handful of choices that your employer offers? Even tougher, do you have to shop for a new policy on the individual market? Either way, it can be hard for ordinary people to understand how these different plans work, and which one is the best kind of health insurance for their family!
Take a moment to learn about the three major types of medical plans on the market today. Once you understand how they work to help you cover your medical costs, it can be easier to decide.
HMO Health Plans
These types of plans have a network of different medical providers. For example, you may get a list of doctors and hospitals in your local area to choose from. In most cases, you must use these network providers in order to have your services covered by the policy. There are a few exceptions, and these should be outlined in your policy, but you will almost always choose a network medical service provider.
The advantages to an HMO plan are cost control and ease of use. If you use a network provider, it is usually easy to get services at a lower price. The disadvantage is a loss of flexibility.
PPO Health Plans
A PPO is similar to an HMO because it will also come with a network. You get the maximum coverage if you stay within that list of providers. However, you are free to choose other medical providers if you accept the fact that those services will be covered at a lower level.
A PPO can still give you some advantages of cost control, but it should also give you a bit more flexibility.
HSA Health Plans
This type of plan has two parts. One part is a higher deductible major medical policy. The other part is an actual savings account that allows you to make deposits.
You can use the money in the account to pay for medical expenses that are not covered. These may be expenses that are not covered by major medical, or they may be out of pocket costs because you have not met your policy deductible yet.
Within limits, you may deduct your deposits from your income taxes. This can be a big advantage for people who want to make the most of their benefits. In addition, the savings roll over from year to year. If you make a habit of saving money into the account, you can grow quite a big pot over time. Upon retirement, you can also withdraw the money without a tax penalty.
If you can save the money, and would like to control your costs and enjoy tax benefits, an HSA plan may be the right one for you. Since the actual medical deductible is higher, premiums should also be lower.
However, these HSA plans only work for good savers. If you never contribute to your account, you will not have money to pay for expenses, and you will not get any tax deductions!
Which Kind Of Health Plan Should You Buy?
There is not one perfect answer for every family. You have to figure out which plans will work best to meet your needs and lifestyle. It is great that we have a lot of choices, but sometimes the choices are hard to make!
How Much Do Different Types Of Health Insurance Cost?
In order to find the right type of health insurance for your family, you also need to know how much different plans cost. A multiple insurance quote system can help you compare different companies in one place!